Jugaad Innovation

Think Frugal, Be Flexible, Generate Breakthrough Growth

Decentralized, nonhierarchal management has been replacing musty command-and-control

management style for some time. One name for R&D’s new bottom-up approach is jugaad, a
colloquial Hindi word that roughly translates as “an innovative fix; an improvised solution born
from ingenuity and cleverness.” This tactic enables inventors to develop innovative products and
services “faster, better and cheaper.” Professors and consultants Navi Radjou, Jaideep Prabhu
and Simone Ahuja examine jugaad innovation worldwide, present inspiring case studies and
explain why Western companies should supplement top-down, traditional R&D with bottom-up
jugaad. getAbstract recommends this revelatory, inspiring exploration to business leaders who
seek to innovate by achieving “more with less.”

Take-Aways

Jugaad is the Hindi term for a clever solution in the face of adversity.

Jugaad is the attitude that with determination and ingenuity, you can do almost anything with
almost nothing.

This tactic is based on six principles: “seek opportunity in adversity, do more with less, think and
act flexibly, keep it simple, include the margin” and “follow your heart.”

Bottom-up “Jugaad innovation” stands in contrast to the West’s structured, top-down R&D
approach.

Jugaad is neither a commercial methodology nor a specialized business process.

Jugaad deals well with scarcity, rapid change and other contemporary challenges.

Western companies can adopt the jugaad R&D approach as a useful supplement to traditional
corporate innovation.

Introducing jugaad in your company requires full support from the CEO.

Like jugaad developers, Western companies should focus more on quickly monetizing new
inventions and less on protecting their patents in the long term.
Many countries now promote jugaad to move innovations quickly to market.

Summary:

Mitticool:

Mansukh Prajapati – an Indian living in the scorching desert village of Ramakrishna Nagar in the
western state of Gujarat – is a trained potter who never finished high school. He also is a brilliant
inventor who created a simple clay refrigerator that keeps foods cold without electricity in the
hottest climates. Prajapati calls his invention the Mitticool – “mitti means ‘earth’ in Hindi.”
Water in the Mitticool’s top chamber moves through the unit’s walls and creates an evaporation
effect that cools food in the bottom chamber.

“Jugaad is about doing more with less.”

In 2001, an earthquake struck Prajapati’s village. The local newspaper featured a story about the
devastation accompanied by a photo of an earthen pot smashed to pieces. The villagers used clay
pots to keep water cool, so the photo legend read: “Poor man’s fridge broken.” The caption,
though meant as a joke, sparked Prajapati’s thinking. His eureka idea: “Why not use clay to
make a real fridge for villagers – one that looks like a typical fridge, but is more affordable and
doesn’t need electricity?” Such an appliance would be a godsend to the poor.

“Jugaad innovators like Mansukh Prajapati view severe constraints such as a lack of electricity,
not as a debilitating challenge but as an opportunity to innovate and overcome these very
constraints.”

After experimenting for a couple of months, Prajapati developed a Mitticool prototype. The
ingenious potter sold his Mitticool to local villagers for about $50. They loved it. Before long,
Prajapati’s refrigerator became a hit throughout India and around the world.

When he saw how poor people embraced his clay refrigerators, Prajapati had another eureka
idea: Take the artisanal craft of pottery and transform it into a mass manufacturing method. He
created a new way to work with clay and taught his techniques to women in his village. Over
time, Prajapati sparked a “‘mini’ Industrial Revolution in pottery.” His next clay product was a
frying pan that holds heat superbly and costs only $2. Today, Prajapati is the guiding light for an
entire industry with numerous employees that develops useful, affordable products for poor
people worldwide. The Mitticool, and Prajapati’s other inventions, demonstrate what ingenuity
and willpower can accomplish in the face of adversity and scarcity. Prajapati is the living
embodiment of what Indians refer to as jugaad – the attitude that with determination and
ingenuity, you can achieve almost anything with almost nothing.

Jugaad:

Jugaad is “an innovative fix; an improvised solution born from ingenuity and cleverness”; it
means being resourceful. In Brazil, people call it gambiarra; in China, zizhu chuangxin; in
Kenya, jua kali. The French know it as Système D; New Zealanders, the “#8 wire.” Americans
once labeled it “Yankee ingenuity” but now call it “DIY,” for “do it yourself.”

“The Mitticool, an idea born out of adverse circumstances, shows how a resilient mind-set can
transform scarcity into opportunity.”

Think of jugaad as a “fluid art and culture.” Jugaad is neither a commercial methodology nor a
specialized business process. It is not a tool. Jugaad is not something organizations do. No matter
what the language or the country, jugaad has universal application. Resourceful and creative
individuals practice jugaad intuitively to improve their lives.

Western Jugaad

While many people associate jugaad with Indian entrepreneurs, the concept has a distinguished
tradition in the West. Benjamin Franklin, one of the United States’ founding fathers, was a
jugaad-prototype inventor. He worked hard to make things better for others. He invented the
Franklin stove, “the lightning rod, bifocals and a carriage odometer,” among other things.
Franklin did not apply for a patent for his stove. Helping others was his only goal. This fits in
with the classic Indian jugaad spirit. The Indian innovators who exemplify jugaad work hard to
attain their personal dharma – that is, the responsibilities they must assume to live properly
fulfilled and meaningful lives.

“Jugaad innovators don’t just think outside the box: They create whole new boxes.”

Cyrus McCormick, a 19th-century American, used meager resources – his lab was his family’s
barn – to develop the mechanized reaper that automated grain harvesting. McCormick’s
invention changed the world, making life better for farm workers everywhere and increasing
food supplies for everyone. McCormick also developed new, improved plows. During
McCormick’s time, America was filled with jugaad inventors who worked with almost nothing
to devise new, beneficial products and processes.

“Top-Down R&D”

While the West was once a great proving ground for the jugaad sensibility, industrial
development supplanted this bottom-up, improvisational style with a top-down, highly structured
approach to innovation. Companies established R&D departments to manage innovation. This
tactic has three defining characteristics: large budgets, structured business methods and tight
control of knowledge.

“Your heart knows what your mind doesn’t.”

Instead of following the jugaad ethos of “more with less,” Western companies seem to prefer to
do “more with more.” This results in overengineered products that are costly to manufacture. The
structured R&D approach is inflexible, elitist and insular. Jugaad allows developers to create
new products “faster, better and cheaper.”

New Challenges

Product developers everywhere face new challenges:

“Scarcity” – The global recession has reduced the financial capital available to small and midsize
firms. The middle class is shrinking; people have less money and natural resources are becoming
increasingly scarce. The result is lower sales and profits for many companies. They must learn to
get by with less.

“Diversity” – Markets and workforces are more varied demographically than ever. Highly
structured approaches to innovation do not align with the diverse nature of modern-day society.

“Interconnectivity” – Social media, mobile devices and cloud computing breed universal
connection between disparate people. Corporate regimented innovation processes must contend
with current expectations of inclusivity and interconnectivity.

“Velocity” – Business events and developments move at blinding speed. Standardized innovation
systems cannot keep pace.
“Breakneck globalization” – Bloated “innovation engines” put Western companies in a
weakened competitive position in the face of business developments worldwide.

“The Six Principles of Jugaad”

Jugaad thrives on scarcity, rapid change, diverse populations and challenging circumstances. Six
basic principles distinguish the “jugaad mind-set”:

1. “Seek Opportunity in Adversity”

People who start businesses in developing nations must deal with adversity, including poor
infrastructure, crippling bureaucracy and regulations, uncertain property rights, shaky local
politics, and poor populations that cannot afford to buy their products. But jugaad innovators see
these difficulties as opportunities.

2. “Do More with Less”

Gustavo Grobocopatel is an Argentinian farmer, born of generations of subsistence farmers. He

wanted to expand the family’s operations, but arable land is scarce in Argentina. Farm labor is
equally scarce. Lacking the financial resources to expand, Grobocopatel leased land instead of
buying it. He subcontracted for labor and rented farm equipment. By 2010, his company, Los
Grobo, had become Latin America’s second-largest grain producer. The proper jugaad attitude
can help you accomplish a great deal with very little money.

3. “Think and Act Flexibly”

After China, India has more diabetics – estimated at 62 million – than any other nation. To help
diabetes patients, Dr. V. Mohan runs a mobile telemedicine clinic to serve distant villages
throughout India. Like other jugaad innovators, Mohan is a flexible thinker who figured out how
to put his ideas into practice. He explains, “I asked myself: What if I can come up with a service
that allows physicians to remotely consult patients without either group having to travel?” After
Mohan established mechanisms for remote diagnoses, he couldn’t afford to pay technicians to
follow up with patients. He persuaded them to work for free. At his urging, India’s government
space agency provided a free satellite hookup for his telemedicine service.
4. “Keep It Simple”

Approximately 26 million children are born each year in India. Of those, 1.2 million do not
survive beyond their first 28 days. Proper incubators can reduce infant mortality, but Western
incubators are too expensive for most Indian hospitals and rural Indian health care workers lack
the training or skill to maintain such units. Indian pediatrician Dr. Sathya Jeganathan designed a
wooden incubator heated only by a 100-watt lightbulb. Her incubator is inexpensive and needs
little maintenance. Jeganathan’s simple unit halved infant mortality at her hospital.

5. “Include the Margin”

Large corporations infrequently design and market products and services to citizens on the
margins of society, including the poor. Therefore, enormous markets of potential new consumers
go untapped. Smart jugaad innovators often move into these markets and score big. For instance,
Dr. Rana Kapoor set up YES BANK with the specific aim of serving the 600 million Indians
without bank access. In business since 2004, the bank earns 2% above its lending costs. This is
much better than the average bank. “We serve the marginal segments of our society...as a core
component of our inclusive business model,” says Kapoor. “I don’t see any contradiction
between doing good for my society and doing well for my shareholders.”

6. “Follow Your Heart”

Jugaad entrepreneurs seldom use focus groups to decide what products to introduce or which
features to include. They tend to rely on their intuition to develop their products. Steve Jobs
thought this way. The visionary Apple CEO was the guiding light for such popular products and
services as the iPhone, iTunes, the iPod and the iPad. Jobs relied on his own judgment about
which products to develop and did not turn to his customers or Apple investors for their
approval. Instead, Jobs believed in “customer-minded innovation,” which relies on intuition,
instead of “customer-driven innovation.”
Make Jugaad Part of Your Organization

Your CEO must fully support any implementation of jugaad principles. With that backing,
execute jugaad in a bottom-up, not top-down, fashion. Showcase the employees within your
company who already demonstrate a jugaad mind-set. Don’t worry about scrambling for patents
for your jugaad developments. Instead, monetize your inventions quickly. Use Internet
collaboration tools to ally with creative individuals and other jugaad innovators.

National Jugaad

Many nations now promote the jugaad concept. The United States helps to promote bottom-up,
jugaad-type innovation through the Social Innovation Fund (SIF), a public-private partnership
coordinated by the White House Office of Social Innovation and Civic Participation (SICP), and
funded by Congress and other organizations. SIF provides capital for community programs set
up by individuals with jugaad mind-sets. Prominent US educational institutions such as Stanford
University (business course: “Entrepreneurial Design for Extreme Affordability”) and Santa
Clara University (“Frugal Innovation Labs”) are developing leaders with jugaad mind-sets.
Britain (“Inclusive Design Program” at Cambridge University) and France have their own jugaad
programs.

About the Authors:

Navi Radjou is a strategy consultant and a fellow at Judge Business School, University of
Cambridge, where Jaideep Prabhu is Jawaharlal Nehru Professor of Indian Business and
Enterprise. Simone Ahuja is the founder of Blood Orange, a strategy consultancy.